Reflecting New Financial Realities

A report from the Charlotte Observer in North Carolina. “Charlotte’s housing market got off to a slow start in 2019, and some experts say that the government shutdown is partially to blame. Data from Carolina Multiple Listing Services showed that home sales declined 9 percent in January from the previous year. This marks the ninth month in a row that the number of homes sold fell from the year before.”

“New residential listings rose 13 percent, which Brenda Hayden, president of the Charlotte Regional Realtor Association said is a sign that seller confidence is increasing. ‘Unfortunately it usually takes the delivery of a message multiple times before people think ‘OK, maybe it is a good sell,’ she said.”

The Naples Daily News in Florida. “There’s good news for buyers in the Naples-Fort Myers market. Home price increases have tapered off, according to Metrostudy. The base sales price for a new home today averages 1 percent less than it did a year ago.”

“‘We’re in the mature stage of the housing recovery. I do think we’re going to see a couple more good years in the housing market, but it’s going to be less growth and less price appreciation than say in 2013 or in 2014,’ said David Cobb, a regional director for Metrostudy.”

“The Naples-Fort Myers market saw 5,139 home starts in 2018 — up 12 percent from a year ago. The upward trend in starts ended a relatively flat period of growth in 2016 and 2017. ‘I think overall the housing market has still got some legs to it, even though this economic recovery has been going on since 2009. It’s the longest economic recovery we’ve ever had,’ Cobb said.”

From 27 East on New York. “Perhaps reflecting new financial realities of Hamptons high-end real estate, Tick Hall, the longtime home of the television host and writer Dick Cavett, has undergone its second significant price drop and is now available for $33.95 million, via Corcoran. When the 19.8-acre estate was originally listed in June 2017, the ask was $62 million, and that was cut to $48.5 million last August. With new representation there is a new effort to sell the 19.8-acre property.”

“Another property is back on the market after a price drop, although this one moved from only a shade under $30 million to $24.95 million.”

‘the ninth month in a row that the number of homes sold fell from the year before’

‘New residential listings rose 13 percent, which Brenda Hayden, president of the Charlotte Regional Realtor Association said is a sign that seller confidence is increasing. ‘Unfortunately it usually takes the delivery of a message multiple times before people think ‘OK, maybe it is a good sell’

With central banks still flooding “the markets” with printing-press liquidity (and adding to their balance sheets), our Keynesian central planners’ asset bubbles and Ponzi markets might still be artificially levitated for some time to come.

“‘We’re in the mature stage of the housing recovery. I do think we’re going to see a couple more good years in the housing market, but it’s going to be less growth and less price appreciation than say in 2013 or in 2014,’ said David Cobb, a regional director for Metrostudy.”

Just got back from meeting with my mortgage broker. Trying to get everything lined up early and optimally. “We don’t expect it to be like last although it’s still in our consciousness. We don’t have the same products these days.” I mentioned the Danville data as a bellweather given the demographics and the issues with nonbank mortgage originations. Basically, mortgage-backed securities being the same beast just wearing a different shirt. He paused.

The U.$. hou$ehold debt and credit report, published Tuesday by the Federal Re$erve Bank of New York, showed that the overall debt shouldered by Americans edged up to a record $13.5 trillion$ in the fourth quarter of 2018. It has ri$en consistently since 2013, when debt bottomed out after the last rece$$ion.

While mortgage debt, by far the largest slice, slipped for the first time in two years, other forms of borrowing rose including that of credit cards, which at $870 billion matched its pre-crisis peak in 2008.

The report also showed that Americans have continued to turn away from home equity lines of credit, or HELOC, which can free up funds for other purchases. HELOC balances dropped to $412 billion$ in the fourth quarter, its lowe$t level in 14 years

Good to see the vanity wall is getting rejected in favor of smart spending and border security. Hard to believe they only xray 2% of the trucks at entry points! One party has had control of the purse strings 8 of the last 10 yrs, and not a fiscal conservative in sight. If they really wanted to stop illegal immigration they would go after the employers who cheat and landlords who rent to them with huge fines and reward whistleblowers.

LOL! Of course not. I said smart border security. Heck, the GOP wants to give out a blank check for everything. At least this time, one party is concerned with cost or pretending to. Ya cant go to war and cut taxes and not expect the debt to blow up.

This, from a Republican:
“First of all, you never have to default because you print the money, I hate to tell you, OK?”
“I understand debt better than probably anybody. I know how to deal with debt very well. I love debt”

My bad. Never feed the trolls. Your boss at the fusion GPS run troll farm sent you to th wrong blog. This one is about real estate. There may be a border wall flame war on Ann Coulter’s or Tucker Carlson’s Twitter feed you can join. That is if they haven’t been banned yet.

Just wanted to follow up on my posts the other day and say that I really do appreciate the concern and advice from everyone regarding my brother’s situation.

There were details left out (obviously, in such a short post), but the basics were all there. I’m trying help him plan his endgame and stick to it, with an emphasis on his safety. Protecting his son obviously complicates the logistics, along with extremely limited financial resources (due to his wife’s financial infidelity), and being on the other side of the country from him limits what I can easily do.

I don’t know how much I will be able to influence his future thinking – our relationship growing up was never the greatest, but I intend to do what I can to convince him to put himself first in the future.

Thanks to Ben, and all of you here for letting me have this quiet, out-of-the-way corner of the internet to vent about this stressful situation without pouring down condemnation.

That house of theirs has been an albatross around his neck. She just had to have it, and of course furnish and keep it to a showroom new level. Bought at the worst possible time, and likely to be sold at the worst possible time.

I’m estimating their income to price ratio was 4.5-5.0 to 1 once her income dried up (she was a realtor just before the crash remember) and she took the mommy option to leave him responsible for paying for everything.

It sounds like she is hung up on keeping the house, even though there’s no way she can afford to on her own*

* if my suspicions are right, she thinks she has a replacement for my brother already picked out.

My brother had a co-worker caught-up in a similar toxic situation, and kids were involved too. The ex got everything, monthly financial support, cash lump sum for half of their (his) assets and retirement account, even his pickup truck! Still not satisfied the ex would send him selfies of her polishing the beau’s helmet, and lots more, mental harassment that the courts ignored despite good lawyers that the co-worker’s wealthy family provided. Then one day, the beau got busted selling dime bags of coke with more stashed in the pickup truck that was still in the co-worker’s name, so the police contacted him too. With the story told the ex was swiftly arrested, and her blood tested positive. Ta-da!

The tables suddenly turned 180 degrees. He got the kids and his truck. The parent’s lawyers went to court to cancel the financial support along with all of the video harassment evidence to add to the case. The truck was trashed, abused really, so he traded it in on a brand new one. Not sure how many years the ex got, but she lost everything.

She hid the fact that she owed taxes, and had not even filed her tax returns, prior to getting married. Thus bringing into the marriage a significant, undisclosed debt… which became joint debt.

I know she tried to explain it away as an accident and oversight to my brother, but I am quite sure it was deliberate on her part. You don’t just “forget” that you are supposed to pay taxes on 1099 income. Especially for 3 or 4 years in a row.

Once my brother was legally on the hook for her debts, and had a baby on the way, he felr trapped and tried to do the ‘right thing’ and dig his way out of it, while also paying support to his ex. From what I recall, I don’t she even fully disclosed the devt all at once, but rather there were additional ‘surprises’ that popped in later years from the state tax authority.

To me, that’s a classic case of fraud – finding and tricking a sucker to pay for her lack of responsibilty.

“A car loan is typically the first payment people make because a vehicle is critical to getting to work, and someone can live in a car if all else fails. When car loan delinquencies rise, it is usually a sign of significant duress among low-income and working-class Americans.”

I recently was looking at overpriced homes near Ann Arbor MI (because my husband–I’ve been reading this blog quite a while and know how y’all skew toward claiming it’s the woman and her ‘nesting’ instinct or whatever that forces otherwise smart men to do stupid things, but I’m in the opposite boat!–insists we buy now, as our long-time leasing situation is being ended. We can technically afford a place, even a median-priced place here, but they are just silly-pricy it feels like to me, and we make more than the median household salary. Of course it could be that AA will become just like the obscenely-overpriced markets, which is what people have been counting on if they’ve been buying in the last couple years! We have the U, and tech start-ups, but we also have poisoned drinking water that nobody wants to admit to) in a neighborhood just outside AnnArbor which seems ‘safe’ enough because it’s not urban but has many of the same issues as the nearby urbanscape where people who cannot afford AA buy into (Ypsilanti). An area of some big homes on large lots, big homes on small lots in little subs, and small-to-medium homes on small lots for the lower-income (plus lots of manufactured homes and an area of townhomes for sale and I think some subsidized housing apartments). Big cars in all the driveways, relatively new. When I was checking the property records for a house with asking price that seemed reasonable for its size, I clicked on the utility payments accidentally and saw that the homeowner had not been fully paying the water bills! Just as much as half at a time, carrying a balance for months and months.
I don’t know what the rules are about utility payments around here, but it was sad to see and not a great portend for the housing in that area I would guess. But new developments are going in all the time, with prices quite a bit higher than these older homes. Big trucks in all the driveways though.

Ann Arbor has got to be a tough market to try to forecast. When I was there on business a little more than 10 years ago, I saw what an isolated pocket it is. IIRC, we flew into Detroit and drove there. The town and U are so intertwined.

IMO, the tech startups are going to be your best bellweather. The U is a relative constant. If I were you, I’d be looking at the overall health of the tech startups: the expansion, stagnation or contracton of existing companies as well as the number of newly-formed companies. You might find crunchbase.com useful for this type of research.

Thanks for those tips! Even the tech startup scene is hard to read, it feels like, because they will expand some, or get acquired and make big money for some of their people but then it’s unclear whether the company taking over is actually going to grab away the ‘talent’ and move them elsewhere. They sometimes make noise about wanting to develop in AnnArbor and sometimes it seems they do t commit. A reason used to be that housing was cheaper here, so quality of life would be better for staff, but if housing starts getting less outrageous again in sunnier places I don’t see the appeal. The tech is also tending to be focused on auto related industries again, and thus spreading out from Ann Arbor to other areas where auto infrastructure is in the state…Pontiac, Detroit, elsewhere. Autonomous vehicle stuff is big , but that is such a minefield it feels like. Even the U feels hard to predict as it might affect housing costs— Chinese buyers might dry up a bit if they can’t or stop wanting to send their kids to school here. We had a period when local realtors thought we were becoming another Palo Alto — from 1999 to 2005 and then it started to die when Pfizer left town and then it further ranked in 08. It feels similar now, but with added Chinese and boomers wanting to retire in Ann Arbor and relive their college days…like Jim Harbaugh for instance lol

It feels similar now, but with added Chinese and boomers wanting to retire in Ann Arbor and relive their college days…like Jim Harbaugh for instance lol

Jim Harbaugh was an asshole when he was there (to say nothing of the basketball players), but my opinion might be tainted by having lived in the ‘jock dorms’ (W/S quad) during that time in the 80s. I always saw the core A2 area as being pretty distorted by the U, but the larger area also seemed totally dependent on the state of big 3 and the next couple tiers of related manufacturing. There was always talk of ‘diversifying’ the economic base, but it never seemed to happen to the extent wanted.

As for wanting to relive those days… I would have to be crazy. My strongest memories are of trudging across campus to 8am engineering math classes in the pitch darkness and freezing temps of winter.

Looking at zillow – yeah – there are some crazy priced homes – all over the price map – in the city and surrounding area.

What is your (hubby’s) reason for wanting to live there? A specific job? or something else?

If the health of the tech startups isn’t particularly transparent, I would turn to the new developments as the bellweather. Big builders follow economic data closely. I would find a floorplan or two in a new development by a relatively big builder (i.e., not a speculative builder) and ad myself to the waitlist, making sure to tell hubby that this is strictly for gather economic information. You may have to attend a release or two but can pass on a purchase. You’ll get notices of new releases and pricing information. The number of homes in each release as well as the spacing between releases will tell you how much inventory the builder thinks the area can absorb. Pricing information, over a period of time, will show you when incentives are being piled on which always preceeds price drops.

Nice to hear I’m not alone!!!
It’s stressful to try and convince him that we’re okay not biting now. I did the same in 2005, until he finally won and we got an offer accepted on a house I didn’t really like but was the least bad option. We didn’t like the inspection results so didn’t buy it ( there was vermiculite in the attic and the roof needed repairing immediately and they were improperly venting into the attic so I felt there might be vermiculite Everywhere!) and then Pfizer left town and the house ended up being bought a little later for 5k less than we offered and 2 years later for 50k less . Now it would likely sell for 100k more than we would have paid for it but we’d have probably saved very little and we’d have spent more than we have paid on rent on mortgage interest and property taxes . Instead we’ve saved pretty decently— at least twice as much as we’d have made selling it at this point— but it’s really hard to sell this idea to the spouse, he somehow believes we’ve just totally lost out and he doesn’t want to lose more he feels. I actually wanted to buy in 2013…i saw some places for reasonable prices then… it somehow he wasn’t interested! The psychology of fear of missing out is really strong…whereas I have greater fear of making a huge mistake !

We had lots of these naive optimistic guys pass through our shop. Seemed like they all had bad credit too, so no chance to become a SCADA operator. We couldn’t count on them to answer the phone while on standby duty either.